As government benefits programs have grown in size and cost, there is greater need to monitor those programs to assure that people receiving benefits are in fact eligible and not receiving funds through error or fraud.
As one example, in the case of unemployment insurance (UI) benefits, the number of people applying for and receiving benefits has increased significantly. In the United States, UI programs are funded jointly by the federal government and the states. The federal government has established broad guidelines for coverage and eligibility, but benefits are administered by each state, with the benefit amounts and various parameters for eligibility varying from state to state. In general, to qualify, the recipient becomes unemployed through no fault of the recipient (as referred to herein, the person applying for or receiving UI benefits or other benefits from any governmental or nongovernmental source may be generally referred to as a “UI recipient”). Once the UI recipient is re-employed, benefits are to cease.
Much of the fraud that occurs in connection with unemployment benefits arises from recipients who continue to work (through the same or different employer) or from recipients who become re-employed, without reporting the employment to the state agency administering the program.
It is often difficult to verify that a recipient is unemployed as required, since benefits are time-based. A recipient must be unemployed for each payment period for which benefits are paid. Benefits may be paid, e.g., on a weekly or bi-weekly basis, and matching re-employment to a week in which benefits have been paid can involve complex and costly audits. Further, a mere delay in reporting re-employment (by a few weeks or longer) by individual recipients can result in large cumulative annual losses (billions of dollars) to the federal and state governments, since there are millions of people receiving UI benefits at any given time.